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Prime Real Estate Fund Brion B.V. d.b.a. Curaçao Heritage Fund

at Curaçao

Report on the annual accounts 1 June 2018 until 31 December 2018 (Shortened Financial year)

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Table of contents

Page

1. DIRECTORS STATEMENT 2018: "HARVESTING HERITAGE" 2

2. FINANCIAL STATEMENTS

2.1 Balance sheet as at 31 December 2018 8

2.2 Profit and loss account for the period 1-6-2018 until 31-12-2018 9

2.3 Notes to the financial statements 10

2.4 Notes to the balance sheet as at 31 December 2018 12

2.5 Notes to the profit & loss statement for the period 1-6-2018 until 31-12-2018 17

3. OTHER INFORMATION

3.1 Related party disclosures 20

3.2 Statutory provision regarding appropriation of result 20

3.3 Independent auditors' report 22

Prime Real Estate Fund Brion B.V., Curaçao

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Directors Statement 2018: “Harvesting Heritage”

The Curacao Heritage Fund (“The Fund”) has successfully

structured/funded its investments and built a robust

company structure for its current operations. The Fund

currently holds a hotel with 35 rooms – Pietermaai

Boutique Hotel - 2 student housing buildings with 45 units

and 3 commercial units. The Fund will continue to focus on

improving its operations to enhance the profitability.

Looking back at the last seven months of 2018, which were the

first operating months for the Fund, a lot has been

accomplished. The Fund has set up a:

• solid hotel business in which guest service is of the highest priority;

• a stable Student Housing business with consistent occupancy of over 80%;

• a stable portfolio of tenants for its commercial units; and

• management company that adheres to the highest standards in fund management.

However, the year 2018 was also marked as the year in which the Hotel Operator bnbmanager

underperformed budget, leading management of the Fund to:

• Initiate several intervention meetings with bnbmanager;

• Curtail some long-term investments in the properties;

• Reduce operational costs; and

• Transferred the critical marketing and sales activity from bnbmanager to Key Hospitality Group

(“KHG”)1 to increase the Average Daily Room Rate (ADR) and occupancy rate (OR) of Pietermaai

Boutique Hotel.

Results 2018

Results shown in this review are based on the profit and loss statement of the Fund, whilst the

prospectus took a cashflow based approach. In order to analyze and compare, please note the following

differences between the prospectus’ budget and the results displayed hereafter:

I. Fees and other costs were absorbed by the hotel operator and therefore not visibly included in

the budget presented in the prospectus (these were presented ‘net’) and

II. The interest payments on the Bonds were not included in the prospectus’ budget, because it

showed cashflow before debt service and not net result.

1 KHG is a leading international hospitality management company specialized in the development and operation of independent, branded, boutique and condo-hotels.


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General

In 2018, the Fund recorded a net loss of ANG 117K; on one hand because the Fund commenced its

operations at the beginning of the low season (June), the high season is therefore not included in the

reported final seven months of 2018. On the other hand, the loss was exacerbated by the

underperformance of the hotel operator that did not meet their revenue targets.

ANG 15K of sales revenue has not been recorded in the 2018 financials, due to the timing effect on

which the sales revenue is recognized. Sales revenue is recognized after a guest checks out of the hotel

and therefor a part of the sales revenue of the current month is recognized in the following month.

Hotel

As stated earlies, the hotel performed below budget, mainly because the operator did not manage to

maintain its previous year ADR and OR. The ADR and OR have increased significantly in the first quarter

of 2019mainly because of the decision of the Fund Manager to onboard KHG.

Key Hospitality Group is a professional services firm in the hospitality industry based out of Hilversum

with related offices in New Jersey (USA). KHG is led by Mr John Laclé whom is personally overseeing the

sales and marketing efforts of the hotel and has negotiated over 15 new contracts with tours- and

travel agents in Europe and the USA. Furthermore, under his leadership we have transferred our

property management system to a more sophisticated platform that seamlessly connects to all Online

Travel Agencies (OTA’s). Together with our inhouse Maintenance Team the hotel room inventory has

been upgraded to meet the standards of the discerning traveller. The effect of these changes is

currently visible as ADR and the OR have significantly increased in the 1st quarter of 2019 compared to

previous year figures.

Student Housing

Income derived from student housing was slightly below budget, because the inflow of new students

took longer than expected (causing a slightly lower OR) and less additional services (such as the rental

of refrigerators) were purchased by students.

The average period for which a student rents a unit lies between the 5 and 7 months, leading to an in-

and outflow of students twice a year. Management has requested Wereld Stage Bureau to come up

with a short-term rental solution, in order to decrease vacancies during both in and outflow periods.

Commercial units

Income derived from the commercial units is on budget. All units were fully occupied in 2018.

Management expects no changes for the foreseeable future.


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P&L - Curacao Heritage FundAmounts in ANG 1,000 June July August September October November December Total

Actual Actual Actual Actual Actual Actual Actual Actual

Income derived from Hotel 68 89 87 118 113 118 123 717

Income derived from Student Housing 26 21 10 32 33 35 34 192

Income derived from Commercial Units 7 7 7 7 7 7 7 46

Sales revenue 101 117 104 157 153 160 163 955

Costs and expenses (120) (141) (154) (163) (158) (156) (181) (1,072)

Net income (19) (24) (50) (6) (5) 5 (17) (117)

Actuals 2018

Additional details regarding the results of 2018 will be provided during the Shareholders meeting.

Investments

During 2018, the initial CAPEX budget was partially stalled, to compensate for disappointing room

revenues. Whilst keeping the sales growth strategy in mind, management made investments in:

• the upgrade of the hotel room inventory;

• the refurbishment of the pool deck and

• the replacement of defect or outdated air conditioners, with new energy-efficient inverters.

Sales and Marketing

The adjustments to the sales and marketing plan for Pietermaai Boutique Hotel (“PBH”), that were

implemented in the final quarter of 2018, have shown an immediate effect in hotel occupancy and

room rates in the first quarter of 2019.

With the new improved website of the PBH (www.pietermaaiboutiquehotel.com), which was launched

in November 2018, the Fund has seen a significant increase in the monthly bookings via this website

from 10 to 22. These direct bookings reduce channel fees.

The new website also has a improved the visibility of the property on websites such as Booking.com.

PBH now is the first property shown when you search for a property in Willemstad.

http://www.pietermaaiboutiquehotel.com/


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Management has also simplified PBH’s room inventory. With the conversion of the 4 single occupancy

bedrooms to double occupancy bedrooms, the property now has 3 room types for guests to choose

from, Pietermaai Classic, Pietermaai Split-Level Suite and Pietermaai Deluxe.

Connecting and contracting with appropriate B2B wholesalers and Tour Operators through KHG, the

hotel now has contracts with new leisure feeder accounts such as Travelworld, Travelclick and

Hotelbeds.

In October 2018, KHG also took over the revenue management service from Xotels. This means that the

Fund now has more control of the pricing strategy of PBH.

The Fund has also partnered with Curaçao Hospitality and Trade Association (CHATA) and the Curaçao

Tourism Board (CTB) for combined marketing efforts. PBH is now present at Trade shows such as 50+

Beurs and Vakantiebeurs in The Netherlands, VakantieSalon in Belgium and ITB and IMEX in Germany.

Key markets for PBH will continue to be the US and Europe. KHG will also focus on the Latin American,

market combining the sales and marketing efforts with the CHATA and CTB approach for that market.

The result of these Sales and Marketing efforts have led to an increase in ADR and occupancy.

Human Resource Management

One of the Unique Selling Points of PBH is our human capital. The high ratings from are guests are partly

due to the high service level of the hotel. PBH will continue to have a dedicated team, for the front

desk, maintenance, housekeeping and management.

Information Technology

PBH has recently implemented a proper hotel management system, RoomKey. This is a big

improvement from its former management system Guesty, which is mostly used for Airbnb-type

accommodations.

With Roomkey PBH is now able to manage all aspects of the hotel. From reservations and invoicing to

housekeeping schedules.

Operations

Because of the reduced CAPEX in 2018, the focus was mainly maintenance and improvement/upgrade

of the rooms and communal area.

- Guest feedback was the lack of sufficient lighting in some of the rooms. Additional lighting is

being placed in the rooms of the Kalksteeg & Tafelsteeg.

- The renovation of 4 single-bed rooms to double-bed rooms

- Refurbishment of the garden and pool area

- Improve air circulation to extend the lifetime of the air-conditioning


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The hotel also introduced Standard Operating Procedures for the daily maintenance of the hotel and

projects.

Going Forward in 2019

Overall, the Fund’s structure and operations have successfully been implemented in 2018. The Fund has

created a solid corporate structure, that not only safeguards an efficient use of resources, but also

creates detailed insight into all financials.

In 2019, management ‘s focus will lie on the disentanglement with the Fund’s current hotel operator by

the 31st May 2019 and the continued focus on service and upgrade of its room inventory.

The disentanglement with the current operator is not expected to affect sales revenue of 2019, as the

Sales & Marketing activities have already been transferred to KHG since the end of 2018.

Based on the current situation, actual sales and forecasts, management expects a:

➢ significant growth in hotel revenue in 2019, due to the onboarding of KHG, which has a specific

mandate to increase the ADR and OR;

➢ significant operational cost reduction, due the integration of critical accounting and

administrative tasks, and the elimination of the commission-based fees of bnbmanager;

➢ slight decrease in income derived from the student housing units, expectations are that

students will make less use of additional services offered; and

➢ no changes in the income derived from the commercial units.

This will strongly improve the profitability of the Fund, as shown in the below budget that has been set

out by management for the financial year 2019, indicating an expected (single year) return on

investment (“ROI”) of 7% for the preferred shareholders and 14% for common shareholders.

Because 2018 resulted in a loss, the possible dividend payment to common shareholders for the year

2019, after absorbing 2018’s losses, is expected to be approximately 7%.

P&L - Curacao Heritage FundAmounts in ANG 1,000 January February March April May June July August September October November December Total

Expected Expected Expected Expected Expected Expected Expected Expected Expected Expected Expected Expected Expected

Income derived from Hotel 198 178 190 169 156 155 180 192 191 205 199 228 2,241

Income derived from Student Housing 36 32 36 36 35 36 23 10 34 36 36 35 386

Income derived from Commercial Units 7 7 7 7 7 7 7 7 7 7 7 7 78

Sales revenue 241 217 233 211 198 198 210 208 232 248 241 269 2,705

Costs and expenses (193) (185) (192) (187) (183) (195) (201) (203) (205) (211) (208) (213) (2,376)

Net income 47 32 41 24 14 3 9 6 26 37 33 56 330

ROI preference shares- cumm 3% 5% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7%

ROI common shares - cumm 0% 0% 1% 2% 3% 3% 4% 4% 6% 8% 10% 14%

Budget 2019

Both presented revenues and expenses have increased, since revenues and expenses that were previously netted

by bnbmanager (part of the hotel income, cleaning, personnel, accounting, operating system costs, etc.) are now

directly recognized by the Fund.


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Actuals first months 2019

Up-to-date financials of the first months of 2019 indicate that the Fund’s targets are successfully met,

due to the successful implementation of the new hotel strategy, leading to an average ADR increase of

ANG 7,00 and an average OR increase of 4 percentage points.

P&L - Curacao Heritage FundAmounts in ANG 1,000 January January February February

Budget Actuals Budget Actuals

Income derived from Hotel 198 199 178 188

Income derived from Student Housing 36 37 32 32

Income derived from Commercial Units 7 7 7 7

Sales revenue 241 242 217 227

Costs and expenses (193) (184) (185) (193)

Net income 47 59 32 34

Budget vs Actuals 2019

January and February generated a combined net income of 93K, which is 14K higher than budgeted.

Expectations are that the profitability of the Fund will further increase once the exit process of the

current hotel operator has been completed, as the operator is still collecting its management fee until

the end of May 2019.

Curacao, 22 March 2019

Yours sincerely,

Bharat Bhojwani Walter Blijleven


2. FINANCIAL STATEMENTS


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2.1 BALANCE SHEET AS AT 31 DECEMBER 2018 Before profit appropriation

31 December 2018 01 June 2018

ANG ANG ANG ANG

ASSETS

Fixed assets

Tangible fixed assets 1

Buildings and land 9,260,677 9,260,677 Furniture, fixtures and fittings 783,809 847,500

10,044,486 10,108,177 Current assets

Receivables

Accounts receivable 2 92,451 - Other receivables 3 12,025 - Accrued income and prepaid expenses 4 37,466 23,591

141,942 23,591

Cash and cash equivalents 5 197,900 468,243

Total assets 10,384,328 10,600,011 EQUITY AND LIABILITIES

Shareholders' equity 6

Nominal Capital 7 32,000 32,000 Share premium reserve 2,844,355 3,168,011 Result for the year -116,831 -

2,759,524 3,200,011

Long-term liabilities

Long-term liabilities 8 7,400,000 7,400,000 Short-term liabilities

Taxes and social security premiums 9 268 - Other payables and short term liabilities

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224,536 -

224,804 -

Total liabilities 10,384,328 10,600,011 * We refer to paragraph 2.3 Notes to the financial statements.


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2.2 PROFIT AND LOSS ACCOUNT FOR THE PERIOD 1-6-2018 UNTIL 31-12-2018

01-06-2018 / 31-12-2018

ANG ANG

Revenue 11 956,177 Salaries and wages 12 128,181 Depreciation 13 70,742 Other operating expenses 14 658,270

Total operating expenses

857,193

Operating result

98,984

Financial income and expense 15 -215,815

Result on ordinary activities before taxation

-116,831

Corporate income tax -

Result after taxation

-116,831


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2.3 NOTES TO THE FINANCIAL STATEMENTS

General

The financial statements have been prepared in in accordance with Book 2 of the Curaçao Civil Code and the Generally Accepted Accounting Principles (GAAP) in the Netherlands.

Activities

The activities of Prime Real Estate Fund Brion N.V. comprises of: to acquire, alienate, manage and exploit registered property and items of property in general. The company is established on May 28, 2013 and had no operational activities in the past. On June 1, 2018 the company started its operations after issuance of shares and bonds and acquiring the property in accordance with the prospectus. Due to the aforementioned the company decided contrary to GAAP to include, as comparative figures, the balance sheet as at June 1, 2018 instead of December 31, 2017. On March 21, 2018 the Centrale Bank van Curacao en Sint Maarten, granted the company with an exemption from the prohibition contained in article 3, paragraph 1 of the National Ordinance on the Supervision of Investment Institutions and Administrators (“vergunningsvrijstelling voor beleggingsmaatschappijen).

Accounting policies in respect of the valuation of assets and liabilities

Tangible fixed assets

Tangible fixed assets are valued at cost less accumulated depreciation and, if applicable, less impairments in value. Depreciation is based on the estimated useful life and calculated as a fixed percentage of cost, taking into account any residual value. Tangible fixed assets are depreciated when they are put into use. Land is not depreciated. Buildings and land are recognized at cost/acquisition price and thereafter revalued annually at fair market value, based on an income approach valuation that is benchmarked against an independent appraisal from a real estate appraiser every other year. The income approach valuation will be based on the Discounted Cashflow Method (DCF); this is a valuation method estimating the value of a real estate portfolio based on its expected future cash flows.

Accounts receivable

Receivables are recorded at fair value and then valued at amortised cost, net of allowances for doubtful accounts, determined individually. On initial recognition the fair value and the amortised cost equal the face value.

Cash at bank

Unless otherwise noted, the liquid assets are, available for disposal by the company or group.

Long term liabilities

Long-term liabilities are liabilities with maturity dates longer than one year. Initially interest-bearing loans and liabilities are recorded at face value and subsequently measured at amortized cost.

Current liabilities

Short-term liabilities are liabilities due within one year or less.


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Accounting policies in respect of result determination

Result

Profit is determined as the difference between net income and all expenses relating to the reporting period. Costs are determined in accordance with the accounting policies applied to the balance sheet. Profit is realized in the year in which the services are invoiced. Losses are taken upon recognition. Other income and expenses are allocated to the periods to which they relate.

Revenue

Revenues from services are recognised in proportion to the services rendered. The cost price of these services is allocated to the same period.

Depreciation and amortization

Depreciation relates to the purchase price of the (in) tangible fixed assets.

Net financial result

Financial gains and losses are the earned and/or incurred interest from/to third parties and group companies.

Taxation

For Curaçao personal income tax (inkomstenbelasting), profit tax (winstbelasting) and dividend withholding tax (dividendbelasting) purposes, the Fund will be set up as a “transparent company” (transparante vennootschap) as meant in article 3, paragraph 1, subparagraph d. of the Curaçao General Tax Ordinance (Algemene landsverordening Landsbelastingen). As such, for said tax purposes the Fund will be treated as a (tax transparent) partnership (vennootschap, als bedoeld in de Landsverordening personenvennootschap). The concept of being treated as a (tax transparent) partnership means that income and assets and liabilities of the Fund are, for purposes of Curaçao personal income tax, profit tax and dividend withholding tax, considered income, assets and liabilities of the Investors in the Fund as “participants” (“deelgerechtigden”) for their pro rata share in the Fund. As a consequence, the Fund will not be subject to profit tax in Curaçao.


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2.4 NOTES TO THE BALANCE SHEET AS AT 31 DECEMBER 2018

Fixed assets

1 Tangible fixed assets

Changes in tangible fixed assets are presented as follows: Buildings

and land Furniture,

fixtures and fittings

Total

ANG ANG ANG

Book value as at 1 June 2018 9,260,677 847,500 10,108,177

Movements

Investments - 7,051 7,051 Depreciation - -70,742 -70,742

Balance movements - -63,691 -63,691

Balance as at 31 December 2018

Book value as at 1 June 2018 9,260,677 854,551 10,115,228 Accumulated depreciation land - -70,742 -70,742

Book value as at 31 December 2018 9,260,677 783,809 10,044,486 Current assets

Receivables

31-12-2018 01-06-2018

ANG ANG

2 Accounts receivable

Accounts receivable 92,451 - A significant part of the account receivables consists of a pending payment from the hotel operator. Sales of hotel operations are recognized in the current month, but paid in the month following. 3 Other receivables

Deposits paid Aqualectra 12,025 - 4 Accrued income and prepaid expenses

Prepayments 37,466 23,591


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31-12-2018 01-06-2018

ANG ANG

5 Cash and cash equivalents

Petty cash 87 468,243 Vida Nova Bank Current Account ANG 197,813 -

197,900 468,243


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EQUITY AND LIABILITIES

6 Shareholders' equity

Movements in equity were as follows: Nominal

Capital Share

premium reserve

Result for the year

Total

ANG ANG ANG ANG

Balance as at 1 June 2018 32,000 3,168,011 - 3,200,011

Result for the year - - -116,831 -116,831 Substracted - -323,656 - -323,656

Balance as at 31 December 2018 32,000 2,844,355 -116,831 2,759,524 Total Equity invested in the Fund is ƒ 3,200,011. An amount of ƒ 323,656 has been substracted from the share premium reserve, before the inception of the Fund, to structure the Fund and consists of the following costs: Fund setup costs 173,159 Real Estate- Due Diligence report 25,000 Financing cost of the Bond issue 24,997 Structure fee 100,500 - Total 323,656 7 Nominal Capital

The authorised share capital consists of ƒ 3,200,000 divided into ,160 ordinary shares at par value of ƒ 100 per share and 160 preference shares at par value of ƒ 100. The issued and paid-up capital consists of 320 shares. The issued share capital did not change during the financial year. Movement in share capital: Nominal

preferred share capital

Nominal common

share capital

Total

ANG ANG ANG

Balance as at 1 June 2018 16,000 16,000 32,000

Movements - - -

Balance as at 31 December 2018 16,000 16,000 32,000


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31-12-2018 01-06-2018

ANG ANG

8 Long-term liabilities

Long term liabilities 7,400,000 7,400,000 Long term liabilities

Bond Issue 5% 7,400,000 7,400,000 The Fund has used a bond issuance to fund its debt structure. The bond issuance has enabled the Fund to broaden their investor base and provided local investors with the opportunity to invest in a fixed income security of a real estate portfolio, that holds diverse properties located within the UNESCO World Heritage boundaries of Willemstad. The Bonds are senior to all shares and will constitute direct, unconditional and unsubordinated obligations of the Issuer and will rank pari passu without any preference or priority amongst themselves. The Bonds are secured by: 1. First Mortgage rights on Real Estate 2. Pledge on Account Receivables 3. First Loss Payee on relevant insurance coverage Amount ANG 7,400,000 Bonds 148 bonds with a Face Value of ANG 50,000 each. Interest 5.0% per annum on a (30/360) basis Issue Date May 31st, 2018 Principal Repayment Bullet repayment of principal at maturity (May 31st, 2023) Term 5 years


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Short-term liabilities

31-12-2018 01-06-2018

ANG ANG

9 Taxes and social security premiums

Sales tax 268 - 10 Other payables and short term liabilities

Accounts payable 106,046 - Current account student housing 104,490 - Deposits received- Commercial real Estate 13,000 - Other accounts payable 1,000 -

224,536 - A significant part of the accounts payable consist of invoices of Aqualectra, that are 1. still under review by Aqualectra, due to incorrect kwh billings or 2. are paid in the following month as bills of Aqualectra are send after month end.


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2.5 NOTES TO THE PROFIT & LOSS STATEMENT FOR THE PERIOD 1-6-2018 UNTIL 31-12-2018

01-06-2018 / 31-12-2018

ANG

11 Revenue

Hotel operation revenue 717,450 Student housing revenue 192,109 Commercial units revenue 45,500 Others revenues 1,118

956,177

12 Salaries and wages

Salaries and wages 107,217 Social security premiums 18,037 Other personnel expenses 2,927

128,181

The operations managers of the Fund and the administrator for the student housing operations are not on the payroll of the Fund. The Fund has signed an agreement with Jewel Investment & Management Group N.V. and CFGRE, to receive additional (FTE) support within their operations. The Fund hired therefore professional services for an amount of ANG 53,966 to fulfill these functions within the entity. Social security premiums

AOV/ AWW costs 8,479 BVZ costs 7,206 AVBZ costs 1,059 ZV costs 1,024 OV costs 269

18,037

13 Depreciation

Depreciation of tangible fixed assets 70,742 Depreciation of tangible fixed assets

Furniture, fixtures and fittings 70,742


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01-06-2018 / 31-12-2018

ANG

14 Other operating expenses

Housing expenses 248,634 Selling expenses 185,622 Office expenses 13,399 General expenses 87,638 Commission BnB manager 122,977

658,270

The commission to BnB manager relates to operational services. Housing expenses

Utility costs hotel 112,303 Maintenance Real Estate hotel 21,860 Insurance costs hotel 11,616 Hotel housing costs 26,563 Utility costs student housing 24,676 Insurance costs student housing 2,904 Cleaning costs student housing 6,039 General costs student housing 2,814 Wereld stage bureau costs 16,979 Waste disposal 5,380 Security costs 17,500

248,634

Selling expenses

Hotel facility promotions & sales 37,562 Sales and marketing expenses 144,761 Entertainment 3,299

185,622

Office expenses

General office supplies 9,443 Telephone costs 3,956

13,399


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01-06-2018 / 31-12-2018

ANG

General expenses

Managementfee 46,375 Legal & audit costs 36,688 Insurance costs 2,442 Bank expenses 1,887 Other general expenses 246

87,638

The manager(CFGRE) of the Fund receives a management fee equal to 0,75% of the Fund’s total assets under management (“AUM”). When taking the 7 operational months of the year 2018 into account, the management fee is calculated as followed: AUM : ANG 10,600,000 % management fee: : 0.75% Year fraction :(7/12) Management fee 2018: 46,375 = 10,600,000 x 0.75% x (7/12). The manager is not intitled to a performance fee as the direct return of 2018 is below the hurdle rate. The performance fee is equal to the amount of (i) 10% of the annual direct return above (ii) the Hurdle Rate of 7% and calculated as followed: Direct return of the Fund: -1.1% = -116,831/10,600,000 = Net result / AUM Performance fee : 0.00 = 10% x ( -1.1% - 7%) = 10% x ( direct return – hurdle rate). 15 Financial income and expense

Interest and similar income 185 Interest and similar expenses -216,000

-215,815

Interest and similar income

Other interest received 185 Other interest expenses

Interest expenses bonds issued 216,000


3. OTHER INFORMATION


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3.1 Related party disclosures

Transactions relating to fund manager CFG Real Estate CFG Real Estate (“CFGRE”) is the fund manager of Prime Real Estate Fund Brion B.V. (“the Fund”) and receives an annual fixed and variable compensation from the Fund, described in the Prospectus and Corporate Agreement. Fixed compensation: The Fund shall pay CFGRE an annual management fee beginning as of the date of the closing and continuing throughout the term. The Management Fee shall be payable in quarterly instalments in arrears commencing on the date of the Closing and shall be equal to 0,75% of the Fund’s total assets under management. Variable compensation (Performance fee): The Fund will pay CFGRE an annual performance fee, beginning as of the date of the closing and continuing throughout the term. The performance fee will be calculated annually upon completion of the audited annual accounts in relation to the respective financial year and shall be equal to the amount of (i) 10% of the annual direct return above (ii) the Hurdle Rate of 7%. The Performance Fee will be paid within 5 Business Days after completion of the audited accounts. In addition the above compensation structure, CFGRE has also received an acquisition fee in relation to the structuring of the fund, described in the Prospectus and Corporate agreement. Acquisition fee: The Fund will pay CFGRE an acquisition fee for its services in connection with the sourcing and structuring of the Property and the Fund, of 1% of the purchase price of the Property within 30 Business Days from the date the Fund has purchased the Property. CFGRE provides the Fund with additional support, within their daily operations, by dedicating 50% of the time of their operations manager to the Fund. The Fund has agreement with CFGRE to reimburse 50% of the payrolling cost of their operations manager to CFGRE, as described in the Corporate agreement. There are no other transactions between CHF and other related parties, besides the ones that are mentioned above.

3.2 Statutory provision regarding appropriation of result

Article 22 of the company statutory 1. In immediate correlation with the adoption of the annual account, the general meeting shall decide on whether or not to distribute or withhold any dividends or make any other distributions from the equity as evidenced by the annual account. 2. From the net profit, as reflected in the profit and loss account, and provided that the net profit is sufficient to this end, to the holders of non-cumulative preference shares a dividend of seven per cent (7%) shall be paid calculated on the basis of the nominal value of their shares being one hundred guilders currency of the Netherlands Antilles (NAf.100.00). If the net profit is not sufficient to pay the seven percent (7%) dividend, the available amount shall be distributed as dividend to the holders of the non-cumulative preference shares. Apart from this, no other dividend is to be paid on the non-cumulative preference shares.


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3. The remaining part of the profits which has not been allocated to reserve shall be distributed to the holders of the common shares. 4. The board of managing directors has the power to distribute interim dividends it any time as an advance payment of dividends expected, with due observance of the preferential rights of the holders of cumulative preference shares. Article 23 of the company statutory No distributions shall be made to the shareholders if the equity of the corporation should be less than the nominal capital or if the equity of the corporation should thereby become less than the nominal capital of the corporation.

Tel: +599 9 462 1200 Fax: +599 9 462 6088 www.bdo.cw

Castorweg 2 P.O. Box 4895 Willemstad Curaçao

BDO B.V., a limited liability company incorporated in Curaçao, is a member of BDO International Limited, a UK company limited by

guarantee, and forms part of the international BDO network of independent member firms.

Chamber of Commerce no: 96038 • Registration no: 102.096.570

Independent auditor’s report To: the shareholders Board of Directors of Prime Real Estate Fund Brion B.V..

A. Report on the audit of the financial statements 2018

Our opinion

We have audited the financial statements 2018 of Prime Real Estate Fund Brion B.V., based in

Curaçao.

In our opinion, the enclosed financial statements give a true and fair view of the financial

position of Prime Real Estate Fund Brion B.V. as at 31 December 2018 in accordance with

Book 2 of the Curacao Civil Code and the General Accounting Principles in the Netherlands

(Dutch Accounting Standards).

The financial statements comprise:

the balance sheet as at 31 December 2018;

the profit and loss account for the period 1 June 2018 until 31 December 2018; and

the notes comprising a summary of the applicable accounting policies and other explanatory

information.

Basis for our opinion

We conducted our audit in accordance with the Dutch Standards on Auditing. Our

responsibilities under those standards are further described in the ‘Our responsibilities for the

audit of the financial statements’ section of our report.

We are independent of Prime Real Estate Fund Brion B.V. in accordance with the ‘Verordening

inzake de onafhankelijkheid van accountants bij assurance-opdrachten’ (ViO) and other

relevant independence regulations in the Netherlands. Furthermore we have complied with

the ‘Verordening gedrags- en beroepsregels accountants’ (VGBA).

We believe that the audit evidence we have obtained is sufficient and appropriate to provide

a basis for our opinion.

Unaudited corresponding figures

We have not audited the financial statements in previous years. Consequently, we have not

audited the corresponding figures included in the profit and loss account, in the statements of

changes and in the related notes.

23 | new perspectives

B. Description of responsibilities for the financial statements

Responsibilities of management and the Board of Directors for the financial statements

Management is responsible for the preparation and fair presentation of the financial

statements in accordance with Book 2 of the Curacao Civil Code and the Generally Accepted

Accounting Principles in the Netherlands (Dutch Accounting Standards).

Furthermore, management is responsible for such internal control as management determines

is necessary to enable the preparation of the financial statements that are free from material

misstatement, whether due to errors or fraud.

As part of the preparation of the financial statements, management is responsible for

assessing the company’s ability to continue as a going concern. Based on the financial

reporting framework mentioned, management should prepare the financial statements using

the going concern basis of accounting unless management either intends to liquidate the

company or to cease operations, or has no realistic alternative but to do so. Management

should disclose events and circumstances that may cast significant doubt on the company’s

ability to continue as a going concern in the financial statements.

Our responsibilities for the audit of the financial statements

Our objective is to plan and perform the audit assignment in a manner that allows us to

obtain sufficient and appropriate audit evidence for our opinion.

Our audit has been performed with a high, but not absolute, level of assurance, which means

we may not have detected all material errors and fraud.

Misstatements can arise from errors or fraud and are considered material if, individually or in

the aggregate, they could reasonably be expected to influence the economic decisions of

users taken on the basis of these financial statements. The materiality affects the nature,

timing and extent of our audit procedures and the evaluation of the effect of identified

misstatements on our opinion.

We have exercised professional judgment and have maintained professional skepticism

throughout the audit, in accordance with Dutch Standards on Auditing, ethical requirements

and independence requirements. Our audit included e.g.:

► Identifying and assessing the risks of material misstatement of the financial

statements, whether due to errors or fraud, designing and performing audit

procedures responsive to those risks, and obtaining audit evidence that is sufficient

and appropriate to provide a basis for our opinion. The risk of not detecting a

material misstatement resulting from fraud is higher than for one resulting from

errors, as fraud may involve collusion, forgery, intentional omissions,

misrepresentations, or the override of internal control;

► Obtaining an understanding of internal control relevant to the audit in order to design

audit procedures that are appropriate in the circumstances, but not for the purpose

of expressing an opinion on the effectiveness of the company’s internal control;

► Evaluating the appropriateness of accounting policies used and the reasonableness of

accounting estimates and related disclosures made by management;

24 | new perspectives

► Concluding on the appropriateness of management’s use of the going concern basis

of accounting, and based on the audit evidence obtained, whether a material

uncertainty exists related to events or conditions that may cast significant doubt

on the company’s ability to continue as a going concern. If we conclude that a

material uncertainty exists, we are required to draw attention in our auditor’s

report to the related disclosures in the financial statements or, if such disclosures

are inadequate, to modify our opinion. Our conclusions are based on the audit

evidence obtained up to the date of our auditor’s report. However, future events

or conditions may cause the company ceasing to continue as a going concern;

► Evaluating the overall presentation, structure and content of the financial statements,

including the disclosures; and

► Evaluating whether the financial statements represent the underlying transactions and

events in a manner that achieves fair presentation.

We communicate with the board regarding, among other matters, the planned scope and

timing of the audit and significant audit findings, including any significant findings in

internal control that we identify during our audit.

Curaçao, 23 April 2019

For and on behalf of BDO B.V.,

was signed

M.W. Falke RA

Ref: R18.061/SL/MF

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